BMW May Oust Chairman
Feb. 05, 1999
MUNICH, Germany (AP) _ Shares of Bayerische Motoren Werke AG rose 3 percent in early trading in Frankfurt amid anticipation that BMW's supervisory board would replace chief Bernd Pischetsrieder.
Recent media reports have fed rumors that the board will decide to oust Pischetsrieder because of years losses at the company's Rover unit in Britain.
BMW, which has declined to comment on the reports, said an announcement on the outcome of a supervisory board meeting was expected this afternoon.
Officially, the supervisory board met to discuss plans for closer cooperation between the BMW and Rover brands to boost Rover's profitability.
BMW has invested more than 6 billion marks ($3.5 billion) in Rover since it acquired the British automaker in 1994. Pischetsrieder, an engineer who took BMW's top job in 1993, orchestrated the Rover takeover.
Analysts expect Rover to post a pretax loss of around 1 billion marks ($590 million) for 1998, including provisions for the work flexibility pact Rover sealed with the unions in December.
But BMW shares have risen this week, a trend analysts attributed to market hopes that Pischetsrieder's departure could open the way for BMW to join the current wave of carmarker alliances. Pischetsrieder has consistently ruled out BMW as a partner in any merger or joint-venture.
BMW is seen as an attractive takeover target, particularly for a U.S. car company, due to its strong position in the European luxury car market.
A Belgian newspaper, La Libre Belgique, on Thursday quoted the head of General Motors Corp.'s European operations, Michael Burns, as expressing a possible interest in BMW. However, John Mueller, a GM spokesman in Detroit dismissed the report, saying: ``There has been no discussion with BMW management.''
BMW was one of the likely targets mentioned when it became known that Ford Motor Co. was seeking a European partner. Ford announced this month that it was buying Volvo's car division instead.
Also last year, Volkswagen chairman Ferdinand Piech floated the idea of joint ownership of BMW and Volkswagen, but BMW dismissed such a possibility.
But a changing of the top brass at BMW wouldn't necessarily mean a change in merger strategy, since the Quandt family, which owns 42 percent of the company, would still have to approve.
Among those rumored as in line to replace Pischetsrieder are BMW board member Wolfgang Reitzle, who is in charge of research and development and enjoys the reputation of a corporate visionary, but reportedly faces resistance from workers' representatives on the supervisory board.
Other candidates mentioned in the media include BMW chief financial officer Volker Doppelfeld and Porsche chairman Wendelin Wiedeking.
Rover union leaders also fear Reitzle might want to close the British plant in Birmingham _ despite a deal last year on new working practices and 2,500 redundancies, which seemed to have secured the factory's future.